My business owes ISG money: Do I still have to pay now that ISG is in administration?

Several ISG companies entered administration on 20 September 2024. If your business owes money to one of the companies in administration, you may be wondering whether you still need to make the payment.

In short, if you owe money to any of the ISG companies that have gone into administration, you will most likely need to pay them.

This article explains what administration is, when to pay any money you owe and when you may like to seek further advice before making payment.

ISG companies in administration include ISG Central Services Limited, ISG Interior Services Group UK Limited, ISG Fit Out Limited, ISG Engineering Services Limited, ISG UK Retail Limited, ISG Retail Limited, ISG Construction Limited, and ISG Jackson Limited.

Understanding the administration process

When a company enters administration, it is placed under the control of an insolvency practitioner, which acts as the Administrator. In ISG’s case, EY has been appointed as the Administrator. Timothy Vance, Alan Michael Hudson and Dan Edkins of EY are leading the process as Joint Administrators.

Now the Administrators have been appointed, all powers of the directors and company management have ceased and the Administrators control the business on a day-to-day basis.

The Administrators’ goals in descending order are:

• to try to rescue the business (where possible)
• to secure a better outcome for creditors than a liquidation would provide
• to manage the distribution of any company assets to creditors.

Do you still have to pay ISG if you owe it money?

Generally speaking, when any company enters administration and stops trading, any business owing it money still needs to pay.

This is the case for ISG. The Administrators have clarified in their FAQ for ISG customers that outstanding amounts must still be paid. The Administrators have recommended making payment using the usual payment account details unless directed otherwise by them.

Any debts paid to ISG will help fund the administration process and ensure that ISG’s creditors are repaid. By paying what you owe promptly, you contribute to the overall administration efforts and avoid potential penalties or legal complications.

What if you owe ISG and ISG also owes you?

If you owe ISG and ISG owes you, the situation is not as straightforward. There is no automatic set-off right when a company is in administration (that is, only paying the money you owe after you deduct the money owed to you). However, there may be scope to reach an agreement with the Administrators to only pay the difference.

What happens if you don’t pay?

In most, straightforward, circumstances, failure to pay what your business owes ISG could lead to several consequences:

Proactive debt collection

EY has stated it will actively pursue unpaid debts starting from 20 September 2024, the date of its appointment. If you don’t settle your debts, the Administrators may take steps to recover the money. This could result in legal action. This will incur additional costs that you may be liable to pay in addition to the money you already owe.

Reputational damage

Not paying debts which are due to a company in administration can lead to negative press attention. It can also raise questions about your own business’s financial health, which could in turn attract further scrutiny from creditors, partners and customers.

Increased costs

Depending on the terms of your contract with ISG before it went into administration, you may be liable to pay interest on any unpaid debts. It is likely that the Administrators will charge this interest because they have a duty to act in the interests of all creditors, which will include maximising all sources of revenue.

Ongoing obligation

Even if you do not pay the money you owe, it is important to be aware that the debt will not simply disappear. Even if ISG moves from administration to liquidation, the Liquidators will continue to pursue outstanding debts (with accrued unpaid interest if applicable).

What to do if you have any questions

If you have any specific questions about the payment process, EY advises reaching out via the email at [email protected].

If you are not sure of the terms on which you have engaged with ISG and / or if ISG also owe you money the situation is more complex. We recommend you seek further advice on your position.

In summary, if your business owes ISG money and ISG does not owe you money, you should probably pay as usual. The fact that ISG is in administration does not absolve you of your financial obligations.